Realized net income on farms across Canada decreased by 2.5 percent to $8.3 billion last year, according to Statistics Canada’s annual farm income report published on Monday.
The agency says rising depreciation charges and higher operating expenses offset a small increase in cash receipts, resulting in the first decline since 2013.
Expenses rise by 2.5 percent
On the expense side, StatsCan says operating expenses rose for the seventh straight year, by 2.4 percent to $46.2 billion in 2017, with machinery fuel costs rising by 11.5 percent. Interest expenses rose by 7.1 percent, with increasing debt (see more on debt totals below.)
Total farm expenses, which includes operating expenses and depreciation, rose 2.5 percent to $53.4 billion in 2017. Alberta posted the largest increase at 3.7 percent.
Income up slightly
Farm cash receipts also rose for the seventh straight year, up 1.8 percent to $61.6 billion. Manitoba (+9.0 percent) and Alberta (+4.5 percent) saw the largest percentage increase, while Nova Scotia (-5.7 percent) had the largest percentage drop.
Livestock producer receipts totalled $25.0 billion in 2017, up 4.5 percent over 2016, with increased income in the hog (+9.8 percent), cattle and calf (+2.3 percent), and dairy sectors (+6.3 percent).
Crop receipts were unchanged from 2016 at $34.1 billion, with large declines in lentil and pea revenues (-45.7 percent and -30.0 percent, respectively.) Soybean receipts fell by 6.5 percent, while canola receipts rose by 7.3 percent and wheat revenues increased by 13.2 percent in 2017.
Payments from private hail insurance and government income stabilization programs dropped by 0.3 percent to $2.4 billion.
The bottom line
Based on these figures, realized net income across the country dropped from a record high of $8.48 billion in 2016 to $8.27 billion in 2017.
However, the change in value of on-farm inventories is excluded in the calculation of realized net income. StatsCan estimates the value of on-farm stocks rose by $222 million in 2017, with increases in soybean, canola, and cattle inventories. When you take that number into account, total net income was virtually unchanged in 2017 from 2016 at $9.8 billion.
Debt passes $100 billion
Total farm debt in Canada exceeded $100 billion for the first time in 2017, according to StatsCan, rising 6.6 percent from $96.00 billion in 2016 to $102.32 billion in 2017. For comparison, a decade earlier, in 2007, total farm debt was estimated at $56 billion.
At the same time, StatsCan reports the total value of farm capital across Canada rose by 5.5 percent last year, from $533.09 billion in 2016 to $562.68 billion in 2017.
If you’re interested in breaking down the numbers further, here’s a link to StatsCan’s farm income tables.